RecapitalBoss:I am now a hostage for next 6 months

JAKARTA. Controlling a number of companies operating in diverse sectors under Recapital Advisors, chairman Rosan Roeslani said he could not help mentioning what his business focus was.

“I’m not focusing on one sector because our business is investment. We tend to do business with a good cash flow, so we can hire many people,” Rosan said in a recent interview with The Jakarta Post.

“When we have many employees, there will be a lot of people praying for us.”

A private equity firm, Recapital was established by Rosan, his high school friend Sandiaga Uno and Elvin Ramli on the brink of the country’s worst financial crisis in 1997. It now has a set of portfolios in financial business through underwriting and brokerage house Recapital Securities, fund manager Recapital Asset Management and insurance business via Recapital Life Insurance and Recapital General Insurance.

Still in the financial business, Recapital also owns Global Sarana Lintas Artha, which is one of the nine licensed brokers in the inter-bank money market and a Bank Indonesia certificates trader.

It also has a 67.85 percent stake in Bank Pundi Indonesia, 24 percent in Bank Kesejahteraan Ekonomi and — through its unit called BFC SPV Limited — a 36.68 percent stake in Jakarta-listed PT Capitalinc Investment.

In the infrastructure sector, Recapital owns Acuatico, a Singapore-based company engaging in water solutions and now runs services through Aetra Air Indonesia, Aetra Air Jakarta and Aetra Air Tangerang, as well as Aetra Air Hanoi in Vietnam.

Recapital’s property and lifestyle portfolio consists of Hotel Grand Kemang in South Jakarta, Losari-Coffee plantation hotel in Central Java, The Hill Resorts and The Edge Villa in Bali, and a footprint in Karang Beras Island – a private island in the Thousand Islands, north of Jakarta.

Recapital also has a stake in Mahaka Media, whose portfolio includes Republika daily. The most recent Recapital expansion
in the media industry is Bloomberg Television and Bloomberg Business Week.

Rosan, who sees himself as a self-taught entrepreneur said that Recapital’s current main asset and contributor was the water business, after enjoying gains in coal mining through PT Berau Coal Energy for a few years.

Recapital’s journey into the coal business started in 2009 by entirely acquiring Berau, which became a publicly traded firm the year after by offering its 10 percent shares to the public.

Recapital was planning to divest its 30 percent shares in Berau in late 2010, when an offer came to Rosan to join another miner, PT Bumi Resources — the crown jewel of the politically wired Bakrie family — for a deal with Vallar plc to form a global mining group listed in London.

After a week-long talk, Recapital agreed to sell a 75 percent stake it controlled in Berau through its subsidiary PT Bukit Mutiara for around US$1.5 billion in a share-swap-plus-cash-transaction deal.

As a result of the deal, Recapital got a 10 percent stake in Vallar plc.

Meanwhile after the deal was closed and a tender offer carried out, Vallar plc — which then changed its name into Bumi plc — now holds 84.7 percent of shares in Berau, which is also 3 percent owned by Bukit Mutiara and 12 percent by the public.

Things went smoothly until Bumi plc’s major shareholders, particularly the Bakrie Group and British financier Nathaniel Rothschild, were engaged in a dispute over a corporate governance issue in late 2011.

As things got worse with dramatic boardroom changes, alleged financial irregularities and email hacking, Rosan decided in late 2012 to sell Recapital’s 10 percent stake in Bumi plc to three other firms — one of them owned by media tycoon Hary Tanoesoedibjo — in a deal critics considered an attempt to help the Bakrie Group win a voting battle in Bumi plc.

“Shareholders are in a fuss, I don’t want to be a part of that bustle, that’s why I’m checking out,” Rosan said commenting on his decision to sell the 10 percent stake.

His exit from Bumi plc apparently settled no problems.

Following criticism — particularly from Rothschild — for being slow in handling alleged financial irregularities, Bumi plc tried to improve its reputation by conducting a review of Berau and Bumi Resources as well as seeking recovery for every loss. Only a review of Berau went through as Bumi Resources declined to cooperate and decided to conduct its own internal audit.

After a review, Bumi plc claimed $201 million missing funds in Berau for unclear business purposes and said it would seek recovery if it could.

In a surprising move, Bumi plc requested Rosan — who was Berau’s president director until last March — to transfer assets amounting to a total of $173 million for the recovery of the missing funds. An expected six-month period of assessment is now underway for the assets consisting of 600 hectares of land near Berau’s mining concession planned to be developed as a township and Rosan’s stake in a coal transporting company.

“I am now a hostage for the next six months,” Rosan said.

He added that spending for the 600-hectare land and other expenditures Bumi plc considered unclear had actually been brought to meetings, making all directors and commissioners totally aware of the issue. He was also said to have received more bonuses than he should have.

“There are so many things that I want to argue. I was very annoyed. I was urged to send Bumi plc a letter, [and I did] but never got a reply,” Rosan said.

“I’m not sure whether Bumi plc would continue the development [of township in the 600-hectare land] or not. For sure, residents will be very angry if the project is cancelled.”

After chaos in Berau and Bumi plc, Rosan said he remained passionate about the coal-mining business as Recapital still had several small coal-mining assets under development in Kalimantan. Moreover, Recapital’s Bukit Mutiara still owns 3 percent of Berau.

“We have to be very careful with something that is too good to be true. I regret [choosing] the wrong partner,” Rosan said, adding that he wanted to partner with old friends sometime in the future.

Rosan, now deputy chairman of the Indonesian Chamber of Commerce and Industry (KADIN) for banking and financial affairs admits that he is close to other businessmen, including the Bakrie, Panigoro and Soeryadjaya families.

“They see that I don’t have any interest in this and that, including politics. So, all are kind to me as they see that I’m not a threat to them,” Rosan said. (Raras Cahyafitri)